IHT planning

By Mary Green

More and more people are paying inheritance tax on their loved ones estates. This can be a shock to bereaved family members, as this can often be the result of increases in property value and just not be expected.

Did you know:

  • Inheritance tax is a 40% tax paid by your Heirs.
  • The current nil-rate band (2023/2024) is £325,000 with an additional £175,000 allowance if you are leaving your property to a close family member.
  • If you leave your estate to your spouse, they will not have to pay any inheritance tax.
  • You can inherit your spouse’s nil rate band and property allowance if they have not used them meaning that there is a potential for £1,000,000 estate to be inheritance tax free.
  • Some shares are called AIM shares can under the current regulations become inheritance tax free after being held for two years. They can also be held within an ISA wrapper which creates further tax efficiency.
  • It is possible to take out a life insurance policy to cover a potential inheritance tax liability and put it in trust so that it can be paid outside of the estate.
  • Certain assets such as woodland and farmland can qualify for agricultural relief.
  • You can make a charitable donation to reduce the value of your estate.

This is where we can help:

  • We can help you plan your retirement income tax efficiently so that you can spend your money without worrying about running out, meaning that you can reduce your estate.
  • We can advise you of the rules relating to making smaller annual gifts within the tax allowance. Which can be a lovely way helping those that are important to you such as children and grandchildren.
  • If you decide you would like to gift larger assets to your beneficiaries while you are still able to see them benefit, we can help you make the best decision for both you and them.
  • Some pensions can be passed on without forming part of your estate, we can review the type of pension, the size of your pension and discuss any contributions you are considering making are within the regulations and fit within your overall plan and objectives.
  • Although we do not write Wills ourselves, we can refer you to a professional who can help you. It is important to have a will so that your estate is distributed how you would like it to be.
  • Pro-active not reactive tax planning and providing guidance on changes to the legislation.
  • We can support the surviving partner, to set up a beneficiary pension, transfer inherited ISA allowances and change investments into their name and to plan their financial future.

Inheritance Tax Advice and Will Writing are not regulated by the Financial Conduct Authority

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